So today the Obama administration revealed their plan to close corporate tax loopholes and shutter offshore tax shelters in order to make it harder for American corporations to avoid paying their fair share in taxes. If implemented, the administration’s plan would generate $210 billion in additional tax revenue.
Conservatives are, of course, up in arms about this. Many of them are claiming that American corporations pay enough in taxes as it is and that tightening up tax laws could lead to American companies moving overseas to take advantage of comparatively lower corporate tax rates. In fact, many conservatives point to Ireland as one such country with a low corporate tax rate.
Let’s deal with the Ireland fallacy first, just because that’s a talking point that comes up pretty often. Even though Ireland has a lower corporate tax rate than the U.S., corporate tax revenue makes up a larger share of their GDP than it does for us. How is this? Well, Ireland doesn’t have all the tax loopholes that the U.S. has, making it harder for their corporations to avoid paying their taxes. Remember, politics doesn’t happen in a vacuum–part of the reason why our corporate tax rate is so high because companies use loopholes to avoid paying their fair share in taxes. In order to recoup the revenue we lose to offshore tax shelters and the such, we have to raise the corporate tax rate. As a corollary, if we closed the loopholes that allow offshore tax shelters to exist, we would be collecting more corporate tax revenue and thus could afford to cut the corporate tax rate without losing any revenue.
But I digress. More importantly, conservatives are being massive hypocrites in opposing the Obama administration’s plan. First, they raise fears that American companies–if pressured to pay the money they owe–may relocate overseas to more corporate-friendly locales. Yet, these are the same conservatives who supported free trade economic policies that led to millions of American jobs being shipped overseas. So conservatives apparently have no problem with a corporation shipping millions of good middle-class jobs overseas as long as that company can rent a room in the Caymans and claim to be incorporated in the U.S.
Second, Republicans have been attacking the Obama administration’s spending almost since day 1, even holding (sparsely-attended) protests to criticize his spending policies. Yet they oppose a plan that would recoup $210 billion dollars in additional revenue; go figure.
Third, conservatives railed against several Obama administration appointees for failing to pay their taxes on time–Tim Geithner and Tom Daschle come to mind–yet they have no problem with American corporations ducking their taxes and bilking the American people out of hundreds of billions of dollars a year.
This is the problem with the conservative outrage-a-day machine, though–they find something new to be mad about every day at the cost of contradicting themselves time and time again. This is why nobody takes the GOP seriously anymore–when you spend day after day scrounging for assorted reasons to attack your political opponents, you eventually lose all credibility. Plus, I don’t think that many people have all that much sympathy for corporations at the moment, particularly ones that abuse the tax system to avoid paying their fair share.
So I say, go Obama. Close the loopholes and get us the money we’re owed. $210 billion is nothing to sneeze at, and according to the laws of this country that money is rightfully owed to the American people. If our corporations don’t like it, they’re free to set up shop in Ireland, where none of these tax loopholes exist anyway.
UPDATE: Hypocrisy #4– conservatives complain about how complex the tax code is, but then turn around and say things like this:
[CNBC’s Erin Burnett]: That’s right. Isn’t it your obligation in this country – there is a tax code for a reason, to take advantage of every bit of it you can and pay as little as you can.
The truth is, conservatives love the complicated tax code because it gives wealthy corporations loopholes they can use to avoid paying the taxes they owe.
But, you know, conservatives are right–let’s be more like Ireland. We can start by following President Obama’s lead and eliminating all the loopholes corporations use to avoid paying their taxes.
And since we’ll be collecting more corporate tax revenue as a result of closing those loopholes we can afford to lower the corporate tax rate while pulling in the same revenue we do now.
Of course, I won’t hold my breath waiting for the GOP to get on board with that plan…